The journey through Parliament of the 2015 Stability Law has just finished and the process for preparing the one for 2016 is already underway, with the update of the economic and financial document (DEF), which is the key planning document finance for economic policy. It's early to judge: what transpires doesn't yet indicate a direction.
It seems certain that the government wants to avoid the VAT increase in 2016 (and in 2017) (the safeguard clause for 17 billion, another 26 in 2017); among the arrows in his bow are the drop in interest charges on the public debt (perhaps 5 billion), the self-reporting measures of capital held abroad (but one-off, other resources must be found the following year), the likely higher GDP growth than current forecasts, this year and next year.
It is known that the prime minister would like more space in the objectives agreed with the European Commission (increasing the deficit for 2016 from 1,8% to 2,2% of GDP), but that is an uphill and short-term road. In the end, there's no escaping it: substantial new spending cuts will be needed, at least 10 billion for 2016, many more for 2017 (didn't we say 32-34 billion?), while the 2015 cuts have not yet been fully defined .
It is announced that it will also look at the so-called tax expenditures, i.e. the multiple tax exemptions ensured over time left and right, but going back is difficult; moreover, there is no measure of the new government to boost the economy that does not contain new tax credits. Instead of plugging the holes in the gruyère, many new ones have been dug for now.
The spending review starts again, moved to Palazzo Chigi (in the hands of Yoram Gutgeld and Roberto Perotti), but for now without a political compass. A new vision of the role of the state and the public sector in the economy has not emerged, of a desire to really change management, use the new powers for the mobility of public personnel, privatize, reclaim public companies, so far we have seen little.
On the other hand, regional elections are looming, a political test of considerable importance for the premier. Recalling that his party, the PD, remains the party of public spending. I hope I'm wrong, but I think that for a clear direction we will have to wait longer; for now, we'll continue with some stunts.
